With volatility on the rise and heavy rotation occurring in sectors all over the market, investors are probably trying to figure out where they can safely put some of their capital to work at this time. That’s why looking at conservative dividend-paying stocks makes a lot of sense. Since many dividend stocks are established businesses with stable earnings, they can offer investors a low-stress place to park their cash during bouts of downside in the market. What’s also interesting is that dividend stocks can be even more attractive as they decline thanks to higher dividend yields.
Choosing conservative dividend stocks that offer a nice payout each quarter along with price upside is a great way to build wealth and create a portfolio that allows you to sleep soundly each night. That's why we’ve put together the following list of 3 conservative dividend stocks to buy now.
1. Public Storage
One thing you realize as you get older is that material possessions take up a lot of space. That’s the beauty of Public Storage’s business model, which is built around providing a secure place for people to store their belongings. The company owns and operates over 2,500 self-storage facilities in 38 states and offers a service that will always be needed. With over 150 million net rentable square feet of storage space, Public Storage (NYSE:PSA) has a dominant position in its respective market and is currently benefitting from increased demand thanks to the pandemic.
What’s great about self-storage warehouses is that they require low operating and maintenance costs, which means they generate strong cash flow to support the dividend payouts. Also, since moving belongings out of one facility and into another can be a big hassle, customers are more likely to stick with their Public Storage unit for the long term. This REIT currently offers investors a 2.89% dividend yield and is the perfect example of a conservative dividend stock to consider buying now.
2. Kroger
When you think about conservative stocks to buy, companies that offer consumer staples are a smart way to go. These types of stocks are great for volatile markets because they are companies that produce and sell items that are essential for everyday use. In fact, you might have noticed that this sector has been showing strength amidst the recent selloff. That’s because when there is uncertainty in the market, investors flock to the safety of consumer staples companies like Kroger.
Kroger (NYSE:KR) is a company that manufactures and processes food for sale in its supermarkets and operates under names like Kroger, Ralphs, Fred Meyer, Food 4 Less, Smith’s, Fry’s, Harris Teeter, and more. As the largest pure-play grocery chain in the country, it’s a solid pick for dividend investors that want a reliable payout each quarter because Kroger’s products will always have a steady demand. There’s also the fact that Kroger is developing its e-commerce and curbside pickup offerings to expand its reach, which could help to grow the company's market share over the long term. This stock offers investors a 1.85% dividend yield and is a solid dividend payer to bank on at this time.
3. Cisco System
Cisco Systems (NASDAQ:CSCO) is an interesting dividend stock to look at for several reasons. While it is a technology company and perhaps not as conservative as other names on this list, Cisco stock is less volatile than many other tech names thanks to its beta value of 0.9. What’s also attractive here is the company’s strong balance sheet that allows for dividend increases and share buybacks. Cisco Systems currently offers investors a 2.8% dividend yield and generates strong free cash flow given its industry-leading status as the world’s largest hardware and software supplier within networking solutions, which means you likely won’t have to worry about dividend cuts.
As more people get back to work, the company’s sales should bounce back very nicely since Cisco is a major provider of high-performance computer networking systems that power offices all over the world. As the dominant supplier for things like routers, switches, and cybersecurity, Cisco’s products are playing a big part in helping enterprises that are switching to hybrid cloud networks. Consider adding this dividend stock if you are interested in a tried and true tech company with plenty of price upside.